The United States has confirmed that tariff on New Zealand exports will increase from 10 percent to 15 percent from the 7th of August, placing the country alongside other key US trading partners, including Japan and South Korea.
Trade and Investment Minister Todd McClay said this decision appeared to be based on a calculation of trade deficits, with countries running a surplus with the US moving to the higher rate.
In New Zealand’s case, the surplus has been modest, around USD 500 million, and was not overly significant in the context of the US economy.
Over the past decade, New Zealand’s trade relationship with the US has seen periods where the US enjoyed a significant surplus and times, like now, when New Zealand has a modest one. Overall, trade is balanced and complementary, reflecting the strength of a long-standing partnership.
“I am seeking an urgent call with the US Trade Representative to make New Zealand’s position clear: this increase risks harming exporters and consumers of both countries. The US currently faces an average tariff of just 0.8 per cent when exporting to New Zealand, far lower than what we face in their market,” said McClay.
New Zealand exports around USD 9 billion of goods to the US annually. At 15 percent, the impact will be considerable for exporters, many of whom absorbed or passed on the earlier 10 percent rate. McClay said that at 15 percent, it becomes much harder.
“Our focus now moves to engaging directly with the US on this current announcement to seek changes to this decision. New Zealand has always stood for open, rules-based trade. We will continue to advocate strongly for a resolution that supports our exporters and maintains the strength of our trading relationship with the United States.”
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